The anticipated Ethereum Constantinople hard fork update will come into effect on the 28th of February this year once the block number 7,280,000 is reached on the Ethereum blockchain. We have already given you a glance on what to expect from the new upgrade in our previous blog post, but now we would like to take a closer look at the development of the Ethereum project, presenting both its past and future updates.
Four stages of Ethereum
Ethereum, initially released in 2015, is a platform for decentralised applications, serving as an extremely powerful computer with no risk of downtime or third-party interference. The network provides a virtual machine called EVM (Ethereum Virtual Machine), which executes scripts through a public node network.
The applications that are run on the Ethereum blockchain are called smart contracts. For example, one of such applications is very familiar to our users – it is designed to distribute weekly net transactional revenue share to the holders of Banker (BNK) token.
Ethereum platform is powered by ‘gas’ – a unit of computation that is used for executing transactions and performing various other tasks within the blockchain. Ether (ETH), one of the most popular cryptocurrencies in the world, was ultimately designed as the means of payment to cover gas costs on the platform.
The team of Ethereum have put forward many improvements to the system throughout the years. The development of the project has been split into four main development stages, each of them symbolising a certain period of progress – Frontier, Homestead, Metropolis and Serenity.
Ethereum Frontier and Homestead: The beginning
At first, the Ethereum platform was designed only for developers, not for the end users, as the platform only featured command-line interfaces. This period was named Frontier with reference to American Frontier, a historical period better known as the Wild West.
The founders of the Ethereum project have mentioned that such name was chosen to resemble a place with immense possibilities, but huge risks as well – the platform brought great potential that attracted many blockchain developers but was also unstable and needed improving.
As the American Frontier period came to an end, life became calmer: newcomers in the USA started to settle in their lands building homes for the future. A similar situation occurred in the Ethereum platform as well. Once the errors were fixed, and the platform itself was adapted for the end users, Ethereum launched its first public version – Homestead.
Ethereum Homestead hard fork has introduced three major improvements. The first of them has removed the so-called ‘canary contracts’, which gave Ethereum team members a chance to stop certain activities within the network. Thus, the platform became more autonomous.
Moreover, the update included a new ETH wallet called Mist, an application for not solely storing and holding ethers, but writing smart contracts as well. Finally, new codes for the programming language Solidity, used within the platform, were introduced.
Metropolis: The current phase
In the last quarter of 2017, the founders of Ethereum have decided to take a step further and introduce a new hard fork upgrade called Metropolis. As there already had been too many improvements to perform a single-time implementation, it has been decided to split the Metropolis phase into two distinctive updates. The updates have been inspired by the historical names of Turkey’s biggest city Istanbul – Byzantium and Constantinople.
Arguably, the main purpose of Metropolis hard forks is the transition from the current Proof of Work (POW) consensus mechanism to a more advantageous Proof of Stake (POS) method. Until now, Ethereum has used a similar model of consensus as the Bitcoin network, where transactions are confirmed by blockchain miners.
Nevertheless, the founders of Ethereum have introduced an alternative model which will make the blockchain more independent and eliminate the problem of miner pools monopoly. At the moment, these pools make up the major part of the miners’ community, in this way reducing competition and causing a possible threat of taking over the network.
Proof of Stake concept relies on ‘stakes’, a certain amount of ethers that each validator – an alternative to miner – will have to deposit to the system. After a certain amount of blockchain transactions is confirmed, the validator would get his stake back with a reward.
This concept should prove advantageous for raising competition between the validators, as it would not require expensive mining equipment and anyone interested should be able to join. It would become costly for validators to control the majority of the network, so a monopoly would also become very unlikely.
The POS concept has still not been fully implemented and will start functioning with a future hard fork named Casper. However, upgrades moving closer to it can be found in both Byzantium and Constantinople hard fork updates.
Byzantium: Delaying the ice age
The first part of Metropolis phase, Byzantium introduced a total of nine updates to the system. First of these, has paved the path for the Proof of Stake method by restructuring the reward system for blockchain miners.
With the update, the award for mining a single block was reduced from 5 ETH to 3 ETH, in this way disincentivising mining on the Ethereum blockchain. However, the update also introduced an 18-month delay to the so-called Ethereum ice age – a state when mining will become extremely difficult, ultimately moving the whole network to a Proof of Stake model.
After reviewing the rewards formula, developers also fixed an issue of minor occurrences when the rewards were bigger compared to the block size. This improvement made the total supply of Ethereum more predictable – a change crucial for the developers, as they are planning future updates in accordance with the block size.
Byzantium update has also increased the privacy within the system by making it compatible with cryptographic primitives – functions that provide cryptographic proof that a transaction has been completed without revealing the identity of the parties participating in the transaction. This upgrade introduced a more autonomous flow of assets within the system.
Other updates were mainly designed to improve the Ethereum smart contracts. The security of these applications has been enhanced by an update which creates a secure environment for smart contracts to interact with unknown sources that might prove harmful to the platform. Another adjustment changed the way gas fees are charged for new smart contracts implemented in the system to enhance efficiency.
Constantinople: The future is near
This month, Ethereum plans to advance into the second half of its third development phase. The upcoming Constantinople hard fork update will provide five core improvements to the Ethereum system. These are mainly focused on delivering more efficient alternatives for some of the functions on the Ethereum blockchain, as well as lowering the gas costs.
Constantinople will provide an alternative for transaction execution to improve the speed on the Ethereum blockchain. As it currently takes around 15 seconds to get a confirmation for the transaction on the Ethereum blockchain, there has been an active search for alternatives to reduce these figures.
One of the improvements of Constantinople, similar to the Bitcoin Lightning Network solution that already has thousands of users worldwide, provides just that. It allows users to set up new types of state channels – off-chain solutions that act as an alternative platform to make payments between two parties without the need of on-chain confirmation.
The upcoming update will reduce the load on the main Ethereum chain, consequently making the transactions faster and the transactions costs lower.
Considerably high gas costs have been regarded as an issue on the Ethereum blockchain for an extended period of time. The developers have put forward three ideas that would help increase the efficiency of gas use for performing various tasks on the platform.
The first one is going to lower the gas used for performing bitwise shifting operations on the Ethereum Virtual Machine by providing a cheaper alternative.
The second update will provide an alternative code for checking bytecode of a contract – this procedure has been extremely gas-consuming in the past but should take a significant price cut after the update is live.
Finally, the third improvement is focused on decreasing the gas metering for a certain opcode, reducing the costs that were usually excessively big compared to the load on the blockchain.
Constantinople is also taking further adjustments for the motion towards Proof of Stake consensus method. The update delays the ice age of Ethereum even further, in this way providing more time for the blockchain developers to prepare the measures necessary for implementing the new consensus algorithm.
What is more, the update also reduces miner rewards. This adjustment should disincentivise mining and in this way both win more time for the implementation of POS, as well as shift more miners to the new model of proof.
Ethereum Serenity: The final phase
The founders of Ethereum are continually trying to improve their blockchain, providing alternatives and updates. The platform will eventually be ready to have the Ethereum Casper update and after that, with the help of another hard fork, move entirely to the new Proof of Stake model.
That is when Ethereum will reach its fourth state, which is called Ethereum Serenity. As the dictionary suggests, it is the state of being calm, peaceful, and untroubled. At that point, the Ethereum platform should have reached its full potential.
How will the Constantinople fork affect Ethereum users?
With the Constantinople fork, Ethereum users will be able to enjoy faster transaction speed and lower gas costs. The update is a significant step towards the final version of the platform.
Apart from reaping the benefits of the newly improved blockchain, Bankera Exchange users will have nothing to worry about as the update on the platform will be implemented automatically.
Bankera Exchange services will not be interrupted throughout the update and platform users will be able to make deposits and withdrawals with digital assets as usually.
If you have further questions regarding the Ethereum Constantinople hard fork update, please contact us at [email protected].